Meeting Asia's growing demand for petrochemicals

Shell’s largest integrated refinery and petrochemical complex is now fully online. The multi-billion dollar project in Singapore boosts the supply of raw materials for many everyday products and uses ultra-efficient Shell technology.

The site is already supplying products to Asian growth markets and to manufacturers in Singapore. It is a cornerstone of Shell’s strategy to focus on growth and profitable downstream markets.

Iain Lo, former Shell Chemicals Vice President for New Business Development & Ventures, talks about the decision to move ahead with the project (2010)

Title: SEPC - Iain Lo, Vice President New Business Development & Ventures - from YouTube

Duration: 4:17 minutes

Description:

Iain explains what the Shell Eastern Petrochemicals Complex represents for Asia and the world.

SEPC - Iain Lo, Vice President New Business Development & Ventures - from YouTube Transcript

[Text displays]

A lengthy and illegible disclaimer or information

[Background music plays]

Bright, energetic music

[Video footage]

A Shell tanker truck drives by.

Close-up of two men in protective gear

Split screen: four scenes of various Shell employees in protective gear at work in various fields. The screen splits further into 16 scenes of various Shell employees, and then splits further into 64 small scenes. The screen flashes and moves so that the scenes become indistinct.

[Music ends]

[Text displays]

Shell people

[Iain Lo]

Vice-President, New Business Development and Ventures, Shell Eastern Petroleum

[Iain Lo]

‘'Hello. My name is Iain Lo, and I’m the Ventures and New Business Development Vice-President for Shell Chemicals. And here we are in the heart of Singapore, and the reason we’re here is because we’re about to start a very special project for me. It’s the Shell Eastern Petrochemicals Complex. Singapore has very many advantages, and if you start looking at it from the market bag, this is in a very strategic location, China to the north, India to the west, we are sitting in Southeast Asia…’’

[Video footage]

Iain Lo addressing the camera. He stands at a railing on a riverbank, a cityscape visible on the far shore.

Camera pans down from blue sky to show the refinery. Smoke or vapour issues from some of the tall chimneys.

From an elevated position, the camera pans from right to left, taking in the vastness of the refinery against blue sea beyond.

[Iain Lo]

‘'…where demand for petrochemicals continues to grow above the rate of GDP growth, so that’s exciting. Secondly, we have Bukom here, a refinery that’s standalone. And, you know, the ability to integrate that with a cracker, give it that additional conversion capacity was another reason. Thirdly, the infrastructure in Singapore’s great, yes. The ability of… you know, great logistics, so you can move your products out to customer, you can get your feedstock in, industrial gas availability, so you don’t have to build everything yourself, you can just buy it in. Also, you know, there’s a big, established petrochemicals hub already here, so there’s a big customer base already here. And, you know, the advantages I describe are also advantages that our customers see, so they will be willing to come and locate in Singapore. And, of course, finally, the Singapore Government has been extremely helpful in providing us the support to be able to take this investment decision and build in Singapore. And one last thing, I think, the talent base in Singapore is something which maybe we don’t always constantly think about, but actually is very important for our business, the ability and access of good talent in this country makes it just very logical for us to build here. It’s giving us such a strong edge, and it excites our staff as well, yes. For us to always think about our competitors and the structural advantages that they have and we don’t have it, and for the first time I think we’re going to have that kind of ability to compete.’’

[Video footage]

Close-up of Iain Lo’s face as he addresses the camera.

From an elevated position, the camera pans slowly from left to right, showing the refinery in the foreground and a tiny island just metres from the island on which the refinery is located.

The camera pans down from a view of the top of a section of refinery against blue sky and clouds to a row of large tanks on the ground.

From an elevated position, looking through tall chimneys, a long, low tanker can be seen making slow progress just off the island’s shoreline.

Aerial view of a shoreline interspersed with inlets and piers. The shot moves closer to shore.

A closer aerial view of the same shoreline. It is crowded with warehouses and buildings. A narrow channel of water flows out from alongside the development.

A close-up of Iain Lo’s head and shoulders as he addresses the camera.

The camera draws out from a view of a massive cluster of pipes and tanks at the refinery.

Workers in protective gear at work on scaffolding at the plant.

The camera zooms in workers in protective gear working on external pipes at the refinery.

[Iain Lo]

‘'It’s not just energizing for me, it’s energizing for all our staff, that now we have the same kind of ability to compete on a level playing field with some of our bigger competitors. Because the growth is in Asia and we want to compete in markets where there is growth, where there is scale, so that we can continue to grow with it. Our customers are here, and our customers are growing here, so it makes sense for us to grow with them.’’

[Video footage]

Aerial view of the refinery, blue ocean in the background. The camera draws out to show a wider view of the refinery.

Aerial view of enormous tanks in the refinery, blue ocean and distant shoreline in the background. The camera draws out to show a wider view of the scene.

Aerial view of the refinery, tall chimneys in the foreground, blue ocean and distant shoreline in the background. Large ships can be seen anchored in the strait between the island and the distant shoreline. The camera draws out to show a wider view of the scene.

[Iain Lo]

‘'In other parts of the world, it may not be the same level of growth, but we have that advantage here and we must take advantage of that. As an engineer, it’s always, for me, extremely fulfilling to see something get built. I remember going out to site when I first came into the job in 2006; it was just a pile of sand, an extension of Bukom Island that’s been reclaimed by the Singapore Government. And today we get out there, that’s thousands and thousands of tonnes of steel in place, you know, ability to make 800,000 tonnes of ethylene a year – it’s just an amazing feeling to see that we have created a very complicated petrochemical complex which gives us a fantastic platform, really, to grow our business here, to meet the needs of our customers and also to nurture a strong talent pipeline for our business, not just in Asia, but globally. So, for me, the combination of all those three really makes me feel really proud.’'

[Video footage]

Close-up of Iain Lo’s face as he addresses the camera.

Iain Lo addressing the camera. He stands at a railing on a riverbank, a cityscape visible on the far shore.

Refinery workers in red overalls working on a platform amongst a maze of external pipes.

The camera pans from left to right, showing an aerial view of part of the refinery.

View from an elevated position, possibly an external platform or scaffolding, of tall smoking chimneys and huge, squat tanks on a stretch of island separated from the viewing location by a narrow inlet. The camera draws out to show a wider view of the scene.

Aerial view of another section of refinery. The camera draws out to show a wider view of the scene and blue sea appears in shot at the top of the screen.

View from an elevated position, possibly an external platform or scaffolding, as railings are visible. The camera pans from right to left, showing the island refinery below. One section of refinery is separated from the other by a narrow inlet, but is connected by a low, flat bridge. A distant shoreline can be seen across the ocean in the background.

Iain Lo addressing the camera. He stands at a railing on a riverbank, a cityscape visible on the far shore.

The multi-billion dollar Shell Eastern Petrochemicals Complex (SEPC) project in Singapore boosts the supply of raw materials for many everyday products and uses ultra-efficient Shell technology to do so.

The site was already supplying products to Asian growth markets and to manufacturers in Singapore. This was a cornerstone of Shell’s strategy to focus on growth and profitable downstream markets.

“Demand for petrochemicals is growing at around 4-5% per year in Asia,” said Iain Lo, former Shell Chemicals Vice President for New Business Development & Ventures. “So being in Singapore positions us very well to capture that growth.”

Output from the site includes mono-ethylene glycol (MEG), the raw material needed to make everything from plastic packaging to polyester clothing. It has the capacity to meet nearly 6% of Asia’s demand for this raw material, or enough to make almost 7 billion polyester shirts a year.

The Shell Eastern Petrochemicals Complex (SEPC) investment project — building new chemical plants and upgrading a refinery — was a huge engineering feat that, at the peak of construction, involved more than 15,000 people from over 20 countries. It took a crane with the biggest capacity ever used in Singapore to lower steel reactors, each one weighing around 1,400 tonnes and as heavy as seven jumbo jets, into the heart of the new MEG plant, which produces the raw material essential to making polyester and packaging.

Title: SEPC - Dr Amy Khor, Mayor of South West District Singapore - from YouTube

Duration: 3:55 minutes

Description:

The mayor discusses Shells partnership with the Singapore government and how industry sits alongside a city in a garden.

SEPC - Dr Amy Khor, Mayor of South West District Singapore - from YouTube Transcript

[Text displays]

A lengthy and illegible disclaimer or information

[Background music plays]

Bright, energetic music

[Video footage]

A shell tanker truck drives by.

Close-up of two men in protective gear

Split screen: four scenes of various Shell employees in protective gear at work in various fields. The screen splits further into 16 scenes of various Shell employees, and then splits further into 64 small scenes. The screen flashes and moves so that the scenes become indistinct.

[Music ends]

[Text displays]

Shell people

[Mayor, South West District, Singapore]

[Dr Amy Khor]

‘'Hi, I’m Amy, Amy Khor. I’m Mayor of the South West District. That is where the Shell’s new Shell Eastern Petrochemicals Complex is located. The complex is located on Jurong Island in Pulau Bukom, and that is part of the South West District. When we plan a city, we take into account the fact that we need to have spaces for industry, we need to have spaces for commerce, we need to have spaces for residential, you know, living, and we also need space for recreation, as well as green lungs. So what we have tried to develop in Singapore really is a city within a garden. In fact, now we are going further; we’re saying that it’s a city within a garden and it’s a city of gardens and waters. So even within the industrial areas, for instance, we have always had this philosophy that we need to have green spaces, green lungs.’’

[Video footage]

Camera moves past a group of women walking along a street lined with lush vegetation.

Close-up of giant leaves. The camera pans down to show clusters of pretty pink and white flowers.

Camera draws out slowly to show the lushly-planted flowerbed in which the flowers are growing.

A public garden. Two women do gentle exercises. People walk by through the park.

A gently-flowing, tiered, manmade waterfall.

A public garden. A few individuals are performing gentle exercises.

A few individuals are performing gentle exercises in the public garden.

[Dr Amy Khor]

‘'We need to have areas where there is greenery, there is spaces even for recreation and so on. And I think even in Jurong Island there are actually amenities available for the workers on Jurong Island itself. And that’s probably the reason why I think that Singaporeans are really used to the fact that although we are a city state, we are a very small island and very dense, yet we are able to live side-by-side, you know, whether it’s residential properties or commercial, industrial uses. I am actually very heartened that Shell has shown that it is responsible, that it has not forgotten about its responsibility towards the environment and the community. I think by its very nature, a refinery and petrochemical hub will have some impact on the environment, but Shell has taken steps to minimize the impact on the environment. They have, for instance, you know, the new plant taken steps in terms of improving its efficiency, in terms of ensuring that the plant meets our stringent environmental standards.’’

[Video footage]

Aerial footage of Shell’s petrochemical plant on a very small, flat, barren island with piers jutting out to sea.

A closer aerial view of the tanks in the plant.

Aerial view, but different angle, of the plant.

Aerial view of the further end of the island plant.

Aerial view of the island from the side that has the piers.

Lower aerial view of the tanks and tall chimneys of the plant.

Lower aerial view of another section of the plant. Huge, open-topped tanks and roads can be seen.

[Dr Amy Khor]

‘'And the Government is always keen to continue to work with Shell to continuously improve the environmental performance of its facilities here. So in that sense, I think I’m encouraged. I’m also encouraged because Shell has been a very active environmental champion as well as a very socially responsible corporate partner. Definitely, I know that the SECP is going to be Shell’s largest fully-integrated refinery and petrochemicals hub, and, in fact, Singapore is already Shell’s largest petrochemical production as well as export centre in the Asia-Pacific region, so, you know, Shell is really a valued investor and partner in Singapore’s economic growth. And, in fact, SECP is really yet another key milestone in Shell’s growth and history as well as in our economic development. And we’ll continue to work hand-in-hand with Shell and see how we can promote, you know, the growth and development of the industry, again, like I say, without sacrificing the impact on the environment and the quality of life for our people.’’

Most efficient production

The MEG plant uses the award-winning technology developed by Shell, called OMEGA (Only MEG Advantage). It uses a fully catalytic process for the conversion of ethylene into MEG instead of a conventional thermal process, and produces more MEG per tonne of ethylene than any other technology in the industry. This process saves shipping and storage costs as it creates virtually none of the other raw materials that come from thermal conversion. It also consumes about one-fifth less steam and generates about 30% less waste water.

Capital costs for the new MEG plant were considerably less than for a conventional MEG plant with the same capacity.

In addition, the refinery and petrochemical plant uses nearly 100% waste water, treated and recycled by Singapore’s national water company. Water is used for cooling and in the reactions to turn raw materials into valuable products.

A crane with the biggest lifting capacity available in Singapore lifts the tallest column in the SEPC project

Squeezing the most out of every barrel of oil

The complex was designed to perform well through the economic cycle. The refinery was integrated with the chemical plant on the island of Pulau Bukom off the coast of Singapore and linked up by a series of pipelines to chemical plants on Jurong Island. They shared the same infrastructure.

The refinery can handle a wide range of crude oil, which it processes into different fuels and petrochemical raw materials. It pumps some of these materials to the new ethylene cracker built next to it for further processing. The cracker converts these into other products, including ethylene, propylene and benzene. Pipelines on the seabed — each 4.5 kilometres (2.8 miles) long — connect the cracker to the MEG plant and other industrial customers on Jurong Island. Ethylene can be cooled down to a liquid for export from a jetty or for storing in a cryogenic terminal.

The refinery and cracker can handle a wide range of raw materials selected to take advantage of fluctuations in market conditions and supply, squeezing the most value out of every barrel of oil.

The cracker, for example, can process heavier, lower-cost raw materials from the refinery, thanks to proprietary Shell technology. This gives it a competitive advantage over crackers that process more costly raw materials. It increases the margins between the cost of raw materials and the sale of the high-value petrochemicals that it makes.

”We can maximise our margins depending on feedstock prices,” says Huck Poh, former General Manager of the Pulau Bukom Manufacturing Site. “We can direct chemical streams to the product that gives the biggest bang for the buck.”

Second mega-petrochemical project

The refinery on Pulau Bukom off the coast of Singapore processes more than 500,000 barrels of crude oil a day, enough to fuel 3.9 million cars.

The cracker was built within the existing refinery while it continued to pump out its products. It started up in March 2010 with the capacity to produce annually: 800,000 tonnes of ethylene, a colourless gas used to make many products from polyethylene packaging to detergents; 450,000 tonnes of propylene, used in car parts, insulation and synthetic rubber; and 230,000 tonnes of benzene, a chemical needed to make styrene and computer casings. A unit to extract butadiene — used, for example, to make rubber —also started up. Shell plans to improve the existing ethylene cracker to boost its capacity.

The MEG plant started up in November 2009. In 2010 it had the capacity to produce 750,000 tonnes of MEG a year.

The SEPC investment is a 100% Shell project and was its largest ever downstream and petrochemical investment at the time of the decision to move ahead. It was Shell’s second mega-petrochemical project after the Nanhai joint venture with CNOOC that started up in 2006, and represents a step in the company's strategy to concentrate the global downstream business into fewer, larger markets. Shell has been in Singapore since 1891.